stock management methods in sap: some distinctive differences

COREY PEARSON[ASUG INSTALLATION MEMBER MEMBER SINCE: 2008

CHAVONE JACOBS[ASUG INSTALLATION MEMBER MEMBER SINCE: 2003

ALLAN FISHER[ASUG INSTALLATION MEMBER MEMBER SINCE: 2008

Stock Management Methods in SAP: Some distinctive differences between IM, WM, and EWM

John Gardner

Real Experience. Real Advantage. 22

We are an SAP Service Partner and Value Added SAP reseller. We are headquartered in Chicago, and with satellite offices in New York City, Cleveland, Washington D.C., and Austin.

Our team of over 85 full-time SAP professionals and our extended pool of hundreds of known contract consultants bring a proven record of success in over 75 SAP projects in the U.S., Canada, Europe and Mexico.

Our consulting professionals are truly Business People who know SAP that bring the right combination of Industry and SAP expertise for your SAP needs.


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Learning Points

Identification of available stock management solutions and the core functionality used within each solution.Key differentiators between the main stock management solutions:

Inventory ManagementWarehouse ManagementExtended Warehouse Management

Guidelines to help determine under which circumstance to use each of the available stock management solutions.


SAP Solutions for Stock Management

Inventory Management (IM)ERP Warehouse Management (WM)SCM Extended Warehouse Management (EWM)

Real Experience. Real Advantage.

Inventory Management (IM)

Inventory Management tracks the quantity and value of a material as it progresses throughout the locationStock is managed by storage locations, which are used to represent logical sections of the site where goods are stored.IM provides very limited information about individual lots, such as which materials are stored in specific storage bins.

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Production Materials

Raw Materials

Finished Goods


Inventory Management – Key Features

Fully Integrated within the Core Modules (MM, PP, SD, FICO)Real Time accounting postingManages Special Stocks (sales order stock, consignment stock)Simple to use… If it posts, it works!No visibility of outstanding picking requestsLimited reporting on picking accuracy (planned vs. actual)IM is well suited for...

Small facility with a simplified layoutLower levels of inventory on handVisual Controls in place to enhance material handlingSimplified material handling processesOutsourced warehouse operationsOnly need visibility of aggregated inventory for the Storage Location

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ERP Warehouse Management (WM)

Warehouse Management (WM) provides flexible, automated support in processing all goods movements and in managing stocks in your warehouse Stock is managed at the bin level for exact location of productsMovement of goods are Point to Point (Dock to Bin, Bin to Supply Area, etc…)

Capacity and Volume assist with managing space in the warehouseCore System processes support

Fixed Bin ReplenishmentPutaway and Picking StrategiesStorage Unit ManagementHAZMATInbound Material ProcessingInternal MovementsOutbound Material ProcessingPhysical Inventory

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ERP Warehouse Management (WM) w Extension Set 2.0

Yard ManagementAppointment scheduling, check in and check out, Assignment of dock doors, loading/unloading activities

Value Added ServicesA value-added service (VAS) is an operation performed on materials, which enhances their value, worth, functionality or usefulness. Value-added services include the following:

RepackingLabelingShrink wrapping

Cross-DockingManagement of inbound and outbound movementsSystem-generated Decisions

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Warehouse Management – Key Features

Fully Integrated within the Core Modules (MM, PP, SD)Manages Special Stocks (sales order stock, consignment stock)Maximizes warehouse space with the use of storage capacitiesProvides full visibility into workload for the user communityLimited reporting on picking accuracy (planned vs. actual)Enable the Extension Sets for complete functionalityWM is well suited for...

Small – large facilitiesLow – Mid level Volume of PicksFacilities with Multiple types of storage (Rack , Bulk, Fixed Bin, etc…)Direct paths for picking and putawayMinimal need for complex Labor and Distance CalculationsProduction sites that require bin level visibility on the shop flooorRF equipment in place to enhance picking and putawaySimple to Complex material handling processes

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Extended Warehouse Management

Extended Warehouse Management (EWM) offers flexible, automated support for processing various goods movements and for managing stocks in your warehouseEWM gives you the option of mapping your entire warehouse complex in detail in the system, down to storage bin levelYou can always see the total quantity of a product in the warehouse, and also know exactly where a specific product is, at any time, in your warehouse complexWith EWM, you can optimize the use of various storage bins and stock movements, and can store together stocks from several plants in randomly-managed warehouse

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EWM Inbound Processes

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EWM Outbound Processes

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EWM Additional Processes

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EWM – Process Oriented Putaway

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EWM – Rearrangement

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EWM additional processes support

Inbound and Outbound ProcessesYard ManagementExpected Goods Received (ASN)Unloading and DeconsolidationCross Docking / Transportation Cross DockingPick from Goods Received and Push DeploymentKit to Stock / Kit to OrderWave ManagementValue Added Services

Optimized Internal ProcessesSlotting and RearrangementStaging for Production SupplyProcess and Layout Storage ControlWarehouse MonitoringGraphical Warehouse Layout

Enhanced Cross ProcessesSupply Chain AnalyticsLabor and Resource ManagementMaterial Flow SystemAuto ID / RFID / Radio Frequency FrameworkManaging Handling UnitsSerial Number Support

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Extended Warehouse Management – Key Features

Complete Functionality to support all major warehousing functionsMaster Data is completely separate from ERPRecommended to be deployed on a separate InfrastructureFuture direction for warehouse management enhancements for SAPEWM is well suited for...

Small ~ large facilitiesHigh Volume of PicksHigh Volume of Cross Docking OpportunitiesComplex picking and putaway requirementsNeed for Labor ManagementHigh volume of Value Added Service tasksHigh level if integration with material handling and flow systems

StackersConveyor Systems

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A few points to consider?

Site LayoutOverall size of the siteTravel DistanceConfiguration of racking and storage areasFlow of material

Business Processes / ServicesProduction and/or DistributionValue Added ServicesCross Docking

Physical Attributes of the layout and products

Visual ControlsMaterial Handling EquipmentProduct Labeling


Final Thoughts

Gain a full understanding of each of the stock management solutions as you document your requirementsMap your business process completely before decidingMake your selection based on your business need

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Thank you for participating.

stock management methods in sap: some distinctive differences

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